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On August 22, 2025, the U.S. government bought just over 433 million shares of Intel stock for just under $9 billion—meaning they now own nearly 10% of the company. The United States then used the CHIPS Act and Secure Enclave Program funding to crown a national champion in one of its most strategically important industries.
Three days earlier, Commerce Secretary Howard Lutnick had explained the logic simply: the government should get equity for its money.
The administration has been on a spree collecting equity ever since. Washington acquired: 5% of Lithium Americas (plus 5% of its Thacker Pass lithium project), a 10% stake in Trilogy Metals, and 20% of the future profits of nuclear builder Westinghouse in a deal. The White House shows no signs of slowing in 2026; the Council on Foreign Relations now counts 37 deals worth $27.6 billion.
Perhaps American leaders are trying to learn from Beijing—but if so they are learning the wrong lessons. China’s national champions were not state-directed; they were forged by manufactured competition. Beijing succeeded by funding many firms at the same time, refusing to choose just one, and allowing the market to do the rest.
Take electric vehicles. As recently as the mid-2010s, China’s car companies were dependent on joint ventures between foreign carmakers and Chinese state-owned enterprises. Now, the Chinese electric car company BYD outsells Tesla—and every other EV manufacturer on the planet. Alongside Xiaomi and Leapmotor, BYD is reshaping the global EV market. Even legacy manufacturer Chery is now earning more than half its revenue overseas for the first time. In 2023, China surpassed Japan as the largest exporter of passenger vehicles in the world.
The process of building this new industry was not cheap. CSIS estimated that between 2009 and 2023, Chinese state support for EVs was over $230 billion. In the years before 2017, that support exceeded 40% of EV sales; by 2023, it was just over 11%. By 2023, the government support per vehicle was estimated at $4,800. This is less than the new electric vehicle tax credit the United States offered from 2023 to 2025. China further tightened subsidies earlier this year.
As subsidies and government support continue to wind down, the market will coalesce around a few strong brands. This process has been underway from the start. Over 500 companies were planning new energy vehicles in China in 2018. Only 129 were still selling them by 2024, and AlixPartners expects only 15 to be financially viable by 2030. Neither Xi Jinping nor any other central planner could have predicted the winners of the 21st-century EV brawl: Xiaomi, a phone company; BYD, a battery manufacturer; and Leapmotor, a car company founded in 2015. All three are publicly listed companies rather than state-owned enterprises.
Now examine what happened when Beijing picked its champion in advance. COMAC was created in 2008 to rival Boeing and Airbus. It is a state-owned enterprise with no rivals and a captive market, as Beijing forces Chinese airlines to buy COMAC’s planes. Nearly 20 years in, COMAC still cannot deliver at the volume or speed that the state has set for it. Commercial aircraft manufacturing is more difficult than car manufacturing. It demands more complex systems engineering and stricter safety standards, but China produces the most engineers in the world. The constraint is not talent. The complexity of building a commercial aircraft is all the more reason to try many different things, rather than line up behind one attempt. As it stands, startups have no reason to challenge the state’s chosen champion, and COMAC has no pressure from other companies to improve or innovate. Beijing bought an aircraft company when it needed an industry.
Washington knows better, because it used to do better.
In 1984, the Air Force kicked off the Great Engine War, splitting the award for F-15 and F-16 engines between Pratt & Whitney and General Electric. This contract was re-competed for every single year for six years. Both engines showed dramatic improvements over the course of the competition.
When Covid-19 emerged and America needed safe and effective vaccines quickly, Washington did not buy 10% of AstraZeneca. Instead, it pumped over $10 billion into eight vaccine candidates, two on each of four platforms. Many never made it to the emergency approval stage, but their mere presence in the race made all the other entrants better. Operation Warp Speed manufactured competition. That competition saved lives.
Now, with Intel, America is copying the structure that produced COMAC and ignoring the structure that produced BYD. America is not funding any American rival to beat Intel at leading-edge logic. Outside of Intel, every single CHIPS-funded leading-edge logic project belongs to Samsung or TSMC.
Even when Washington does write multiple checks, it still picks winners. In July, the Commerce Department signed letters of intent with seven more chip firms, acquiring a minor stake in all seven. Digging deeper into the awards shows that the United States picked a winner for each gap in the semiconductor supply chain: a memory company, a lithography company, a substrate maker, a photonics firm, and so on.
The equity portion of the Intel deal has been incredibly profitable. The United States has seen its investment more than quadruple in value, and that’s a problem. In treating Intel as an investment vehicle, Washington has created a financial incentive to ensure that Intel remains dominant. Outside challengers only serve to dilute the value of the government’s 433 million shares. One year in, Intel still lacks a customer committed to the 14A, its most advanced node; it also knows the government has 433 million reasons to prevent it from going bust.
If America is going to spend big on semiconductors, AI hardware, and technology no one can conceive of today, it should be spending that cash wisely. America should not be in the business of crowning champions but instead should be running the tournament and manufacturing competition. To get a world-class chip company, America must first build a chip industry, then let it fight.
Shahn Louis is the founder of Anansi Strategic Intelligence LLC, a Washington, D.C.-based geopolitical risk firm. A former senior intelligence analyst with experience across the Department of Defense and the Intelligence Community, he specializes in China analysis and East Asian regional dynamics.
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